Who is the “Escrow Agent” and what do I put in Para. 5?
Escrow is the process of placing funds in trust with a third party until all conditions are met. The Escrow Agent for our TREC contracts is the neutral third party holding trust funds, conducting the closing, and making disbursements after the closing and funding. This could be a Title Company or law firm, or even one of the brokers in the transaction, although that is no longer common practice.
In Texas, our title companies usually do double duty - conducting the escrow and also issuing the title insurance policy as an agent for the title insurance company. In other states or local areas, you may find these roles separated, with different companies performing different aspects of the transaction.
For Paragraph 5A of the TREC contracts, put the name of the firm or attorney conducting the escrow. Do not put the name of the individual Escrow Officer or Closer at the firm.
The first blank in Paragraph 5A is name of the fiduciary being appointed as Escrow Agent, a defined term of the contract. In the same paragraph, the contract requires the Buyer to make their check for the earnest money and option fee payable to the name in the first blank. In the example above, if we had placed the name of our closer, Ernestine Escrow, in the first blank, the Buyer must pay Ernestine directly – but Ernestine cannot accept trust funds bound for escrow. The funds must be paid to Super Title & Abstract, but then the Buyer has failed to perform exactly how the parties agreed.
If the parties want to specify the name of the individual Escrow Officer, Attorney, or Closer, they should make it to that person’s attention in the address blank.
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Bart Stockton is Associate Broker (TX & OK) and Chief of Operations for Paragon. An educator at heart, Bart writes and instructs continuing education courses focusing primarily on the topics of contracts, law, ethics, and risk reduction. Nothing in this post shall constitute legal advice; consult a skilled real estate attorney. ©2025 Bart Stockton Real Estate Education. All rights reserved. Used by permission.
